Paying for Care:
Who pays what?
Understanding the costs and financial support available when considering care options.
How will I be assessed for Home Care?
If you’ve been finding everyday tasks like washing, dressing, or moving around your home increasingly difficult, it may be time to consider home care support to help you live more safely and comfortably. Even if you already know what kind of assistance you need, the first step toward receiving care is to arrange a Care Needs Assessment.
During this assessment, a trained professional will visit your home to talk with you about your daily routine, identify the areas where you’re facing challenges, and determine the types of care and support that would benefit you most. You can find out more in our detailed guide: What to Expect from a Care Needs Assessment.
Once the assessment is complete, you’ll receive a Care Plan — a personalised outline of the services and support available to meet your needs. This may include scheduled visits from carers, home adaptations, mobility aids, and more. Learn more in our guide: All About the Care Plan.
If you’re hoping to receive local council funding to help cover the cost of care, the next step will be a means test. This financial assessment helps the council decide whether they will fully or partially fund the recommended services.
Who pays for home care?
Paying for Home Care: What Are Your Options?
How you pay for home care or whether it can be funded on your behalf depends on where you live and your personal financial situation. Below are the main options:
Option 1: Fully-Funded Home Care
You may be eligible for free home care funded by your local council if a financial assessment (means test) shows that your income and savings are below a certain threshold.
-
If you’re not moving into a care home, the value of your home is not included in the means test.
-
In England, if your total capital (savings and assets) is below £14,250, and you retain a minimum weekly income (currently £189.00 for a single person above Pension Credit age), your care costs may be fully covered.
-
You can choose to let the council arrange your care or receive direct payments to organise it yourself.
-
In Scotland and Northern Ireland, home care is often free to those who have been assessed and found eligible — and in many cases, this is not means tested.
Option 2: Partially-Funded Home Care
If your capital falls between £14,250 and £23,250 (in England), you may still qualify for partial funding from your local council.
-
You may need to contribute toward your care using your income (e.g., pensions) and potentially tariff income, depending on your circumstances.
-
The council will explain exactly how much you’ll need to pay and how their contribution will work.
-
You may still qualify for other benefits or financial support, which we cover later in this guide.
Option 3: Self-Funded Home Care
You’ll likely need to self-fund your home care if:
-
Your capital is over £23,250 (in England) or £24,000 (in Wales).
-
Your income is high enough to cover your care without bringing you below the financial threshold.
If you are self-funding:
-
You will need to arrange and pay for your care services directly.
-
Even if you pay privately, your local council should still provide advice, guidance, and assessments to help you make informed choices.
What about NHS funded care?
In some cases, the NHS may cover the cost of home care through NHS Continuing Healthcare (CHC) a funding programme designed for individuals with complex, ongoing medical needs due to a serious illness, disability, or following an accident. Unlike other funding options, CHC is not means tested, meaning your income and savings are not taken into account.
While this can be a valuable option if you meet the criteria, it’s important to note that eligibility is strict, and only a small number of people qualify for this support. If you believe you or your loved one may be eligible, it is definitely worth exploring further but your local council should still be your first point of contact when arranging home care.
You can learn more about NHS Continuing Healthcare here.
How to self-fund or partially-fund home care
If you’ve chosen to self-fund your home care, or you're looking to supplement funding provided by your local council, there are several options available to help cover the costs:
-
Using savings or investments
-
Combining income from pensions and/or property
-
Downsizing to a smaller home and using the proceeds for care
-
Equity release, which allows homeowners to access money tied up in their property
-
Financial support from family members
-
Claiming eligible state benefits
-
Purchasing an immediate needs annuity, which guarantees regular payments to cover care fees for as long as needed
If you're unsure which option is right for your circumstances, it’s highly recommended to speak with an independent financial adviser, ideally one accredited by the Society of Later Life Advisers (SOLLA). They can offer expert guidance tailored to your needs and help you make informed decisions about funding your care.
Support funding from the Government
Government Benefits to Help Fund Home Care
If you're funding or partially funding your home care, the good news is that financial support is available — and it doesn’t always depend on your income or savings. The two most relevant benefits for people needing home care are:
-
Personal Independence Payment (PIP) – for individuals under State Pension age
-
Attendance Allowance – for individuals over State Pension age
Personal Independence Payment (PIP)
PIP is a non-means-tested benefit for people under State Pension age who need help with daily living tasks or mobility due to a long-term illness or disability.
You may be eligible for PIP if:
-
You are under State Pension age (and if you begin receiving PIP before this age, it will continue afterward)
-
You have a long-term physical or mental health condition that affects your daily life
-
You need help with daily activities, moving around, or both
PIP is made up of two components:
-
Daily Living Component
-
Standard: £68.10 per week
-
Enhanced: £101.75 per week
-
-
Mobility Component
-
Standard: £26.90 per week
-
Enhanced: £71.00 per week
-
Your award depends on how much support you need. PIP is not based on National Insurance contributions and won’t be affected by income or savings.
To learn more or apply, visit the GOV.UK website.
Attendance Allowance
Attendance Allowance is for those who are over State Pension age and need help with personal care or supervision due to an illness, disability, or condition such as dementia or visual/hearing impairments.
You may qualify if:
-
You are over State Pension age
-
You need support with tasks like washing, dressing, or supervision for safety
-
You have required this support for at least six months
-
You are terminally ill (in this case, you can claim immediately)
This benefit is also not means tested and doesn’t affect other benefits. Like PIP, it has two rates depending on your level of need:
-
Lower rate – £68.10 per week (for help needed during the day or night)
-
Higher rate – £101.75 per week (for help needed during the day and night)
Payments are made every four weeks and are tax-free.
To apply, you can download the claim form from the GOV.UK website.
What if i am self funding and my money runs out?
Planning for the Long Term
It’s natural to feel concerned about how long you might need to fund home care yourself especially when it’s difficult to predict how many years of support may be required. Fortunately, if you're self-funding and your savings or capital fall below £23,250 in England, your local council may step in to help with the cost of your care.
To avoid any disruption, it's a good idea to contact your local authority a few months before your funds reach the threshold. This allows enough time for an assessment to be completed and support to be arranged, ensuring your care continues without interruption or financial strain.
What is the ‘7 year rule’, and is it real?
There’s a long-standing myth in the UK around Inheritance Tax that often leads to confusion. Many believe that if you gift a property or a large sum of money and pass away within seven years, the recipient will be liable for Inheritance Tax. As a result, people often assume that the same seven-year rule applies to care fees thinking that any assets given away more than seven years ago won’t be counted by the local authority.
This is not true when it comes to care funding.
Unlike Inheritance Tax, there is no fixed time limit for local authorities to look back when assessing whether someone has deliberately deprived themselves of assets in order to avoid care fees. Regardless of how long ago the gift was made even if it was over seven years ago it may still fall under Deprivation of Assets rules.
What matters most is:
-
Your health and care needs at the time you gave away the asset, and
-
Your intentions specifically, whether there was a reasonable expectation of needing care in the near future.
To avoid unintentionally breaching these rules, it's wise to speak with a qualified financial adviser, especially one experienced in later-life planning. They can help ensure that any financial gifts or transfers are made appropriately and transparently.